巴林：财政压力

Issuer of report:HSBC Bank Middle East Ltd,DIFCView HSBC Global Research at:https://www.research.hsbc.com16 -19 June, The May Fair Hotel, LondonRegisterGCC Exchanges Conference 2025Simon WilliamsChief Economist, CEEMEAHSBC Bank Middle East Ltd, DIFCsimon.williams@hsbc.com+971 50 9143382Ryan WalterEconomist, MENAHSBC Bank plcryan.walter@hsbc.com+44 20 7718 9563EconomicsBahrain ◆◆◆ Against that difficult backdrop, GDP data for Q4 are more encouraging, showing economicgrowthprinted at aone-year high of 3.4% y-o-y, boosted by a 4.6%increasein non-oiloutput(charts19-20).Theabsence of seasonally-adjusted data makes the underlying trend difficult toassess, butproduction-sidefigurespoint tostrong performance across the service sector,led bydouble-digitgainsin transport and communicationsand asharp rebound inaccommodationandfood services.The oil economy continued tocontract, but this was more than offset by a pick-upin manufacturing activity, whiletheconstruction sector rose by an impressive 7% y-o-y after asimilar gain in Q3.The strongerreadings alsocoincided with broad revisions to the GDP series,with the new figuressuggesting y-o-y growth between Q1-22 and Q3-24 was on average0.5ppts higher than previously stated.This helped lift the pace of expansion for 2024 as a wholeto 2.6%, though after excluding the hydrocarbon sector the performance was far stronger, ataround 3.8%(chart 22).1. The budget deficit widened in nominalterms last year…2. …and as a share of GDPSource: CEIC,Ministry of Finance and National Economy, base prospectus for 29April 2025international sukuk programme, HSBC calculations. Note: 2024 data arepreliminary.Source: CEIC,Ministry of Finance andNational Economy, base prospectus for 29April 2025international sukuk programme, HSBC calculations. Note: 2024 data arepreliminary.3.The deterioration waspartly driven byoil losses, which took overall revenuelower…4.…more thanoffsettingapick-up in non-oil earningsSource: CEIC,Ministry of Finance and National Economy, base prospectus for 29April 2025international sukuk programme, HSBC calculations. Note: 2024 data arepreliminary.Source: CEIC,Ministry ofFinance and National Economy, base prospectus for 29April 2025international sukuk programme, HSBC calculations. Note: 2024 data arepreliminary.-1.8-1.5-1.2-0.9-0.6-0.30.0-1.8-1.5-1.2-0.9-0.6-0.30.020162018202020222024ThousandsThousandsBahrain Fiscal BalanceBHDbnBHDbn-14-12-10-8-6-4-20-14-12-10-8-6-4-2020162018202020222024Bahrain Fiscal Balance% of GDP% of GDP-50-2502550-50-250255020162018202020222024Bahrain Fiscal RevenueHydrocarbonTotal% y-o-y% y-o-y0.00.20.40.60.81.01.21.40.00.20.40.60.81.01.21.420162018202020222024Bahrain Non-Hydrocarbon Fiscal RevenueBHDbnBHDbn Source: CEIC, HSBC calculations Source: CEIC, HSBC calculations15.Weaker oil prices look set to weigh onearnings through H1…Source: LSEG DatastreamSep-23Dec-23Mar-24556065707580859095100USD/bbl 518.…andthe Kingdom hasrelatively littleleft to draw from itsexisting GCC creditlineSource: Base prospectus for 29 April 2025 international sukuk programme. Note:data are asof end-2024.20. …with gains on both fronts led bythenon-oil economy…Source: CEIC,Information & eGovernment Authority, HSBC calculations22.…leaving output up around 4% for theyear as a wholeSource: CEIC, HSBC calculations. Note: non-mining and quarrying is used as aproxy for non-oil prior to 2024.ThousandsDisbursedUSD7.5bn(73%)UndisbursedUSD2.8bn(27%)Bahrain 2018 GCC Support Package-10-8-6-4-20246-10-8-6-4-20246Bahrain Real GDPOilNon-Oil% y-o-y% y-o-yRevisionsQ1-24Q2-24Q3-24Q4-24-9-6-30369-9-6-3036920162018202020222024Bahrain Real GDPNon-OilHeadline% y-o-y% y-o-y Source: CEIC, HSBCcalculations19. More positively, GDP growth pushedhigher in Q4 and data through Q3 wererevised up…Source: CEIC,Information & eGovernment Authority, HSBC calculations21.…which was boosted by strongerindustry and services readings…Source: CEIC, HSBC calculations0.01.53.04.56.07.59.020222023Bahrain Real GDP% y-o-yPre-revisionOther servicesFinancial servicesHospitalityConstructionManufacturingTransportIT and comms0202Bahrain Real GDPTrailing four-quarter average% y-o-y% y-o-y 6Disclosure appendixAnalyst CertificationThe following analyst(s),economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the coveringanalyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) orissuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and anyotherviews or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflecttheir personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specificrecommendation(s) or views contained in